Ch 8 On June 1 Huntley Company borrows $50,000 from the bank by signing a 60-day
ID: 2802438 • Letter: C
Question
Ch 8 On June 1 Huntley Company borrows $50,000 from the bank by signing a 60-day 6% interest bearing note. Instructions Prepare the necessary entries below associated with the note payable on the books of Huntley Company (a) Prepare the entry on June 1 when the note was issued. (b) Prepare any adjusting entries necessary on June 30 in order to prepare the monthly (c) Prepare the entry to record payment of the note at maturity financial statements. Assume no other interest accrual entries have been made.Explanation / Answer
As per policy, one one question is allowed to answer, so answering first mentioned Problem III,
Answer to Problem III)
Journal Entries :
Date Accounts Titles and detail Debit $ Credit $ a June 1 CAsh 50000 Note Payable 50000 (being note payable accepted) b June 30 Interest Expense 250 Interest Payable 250 (50000 * 6% * 1/12) c July 30 Note Payable 50000 Interest Payable 250 Interest Expense 250 Cash 50500 (Being the note paid off on maturity alongwith interest)